During the course of the last month, the Securities and Exchange Commission brought two enforcement actions related to inadequate disclosure of perquisites.
In early July, the SEC issued an order finding that, from 2011 through 2015, an issuer failed to follow the SEC’s perquisite disclosure standard, which resulted in a failure to disclose approximately $3 million in named executive officer perquisites. In addition to the imposition of a $1.75 million civil penalty, the SEC order mandated that the issuer retain an independent consultant (at its own expense) for a period of one year to conduct a review of its policies, procedures, controls and training related to the evaluation of whether payments and expense reimbursements should be disclosed as perquisites, and to adopt and implement all recommendations made by such consultant.
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